As the country begins to lift the restrictions on business closures, I took the opportunity to observe some of the general characteristics of our small business owners. In an earlier message, I referred to business owners as either those who dug in, waiting to be rescued from a plight not of their own making or those who were agile and adapted quickly to that same plight. Today, I want to share an observation based on those two types of business owners and what, beyond mindset, drives the differences.
For those who chose to dig in and wait on government assistance, I noticed they were relatively lacking in adequate resources even before government restrictions were levied. For example, their bottom line was weak, cash flow was non-existent, the business was already stagnant or at least lacking in creativity that could grow the business, and in almost all businesses that ended up closing, they were stretched beyond their means and the quarantine served to underscore a business being poorly managed. For startups, you might want to give them the benefit of the doubt, but I question if they were truly even ready to start a business if this event, in their eyes, caused their demise. For the long-standing business, in existence for a generation or more, their closure certainly cannot be solely blamed on COVID-19. My guess is they were already contemplating a sell or a closure and took advantage of the situation. Probably not a bad idea, but why not be truthful with your customers and just tell them, “It was time.”?
For those who were agile and adapted quickly, we all need to focus on those models and gather insights for best case design. For example, very few if any suffered from resource issues. They had the recommended 3-6 months of business savings in the bank (a lesson learned from as recent as 2008-2009). The labor pool became their dream. So many folks quickly let go could be snatched up, trained and productive in relatively short order. Raw materials were quickly available and for many, it was raw materials they were not ordering in their normal line of business. But the number one characteristic these small business owners possessed was the ability to recognize the environment around them changing at lightening speed and their own confidence to take the risk and make a CHANGE. OK, maybe that is mindset, but without the financial reserves, ready labor and materials, even the mindset wouldn’t be enough to get them moving as fast as was required! Bottom line: ALWAYS BE PREPARED! (Where have we heard that before?)